Wireless Providers to Pay Universal Service Fees?

andyo writes "Mailing lists are abuzz with the news that wireless Internet providers may have to pay fees to support plain old telephone service. My own perspective is at the O'Reilly Network." The Universal Service Fees are taxes set up long ago to assure that telephone service was provided to everyone, even people who it would normally be uneconomical to serve. The theory is a good one, the execution maybe not. (Maybe if the fees went towards Universal Broadband?)

Comments

Fees, taxes, fees, taxes

[freeio]

The local phone service I get (through my cable provider) comes with a bill broken out according to every mandatory fee and tax, and the mandatory fees and taxes are larger then the phone service cost itself.

Whatever they may be for, the combination of added fees and taxes on phone service is exhorbitant already. Adding them to other net services is just another revenue stream for someone else.

Phbbbbbt!

Wrong Decade, Wrong Law

[blankmange]

Unfortunately, this seems to be an old regulation that did its job and then was never updated for how the telco's work now. Nothing new -- we have seen these examples for years now. Update the regulations and make them work for what goes on today and possible tomorrow....

just a bit more proof

[medcalf]

that taxation with representation isn't so hot, either.

Actually, it's worse than that. This is another form of taxing the unrepresented, since WISPs are unlikely to get the ear of Congress for a redress of grievances, when compared to the telcos who can spit out large amounts of bribes...er, subsidies...er, direct democracy to the Reps and Senators.

Re:just a bit more proof

[ahde]

Bill Gates pays income tax on something like $325,000 a year, and probably has enough deductions to whittle it down to about $1.50. Now, when he cashes in stock he gets hit with capital gains, and when he buys stuff he gets a sales tax and maybe a luxury tax, but he (and those like him in the top percentages) pay very little taxes. And Microsoft pays nothing.

Universal broadband better?

[NanoGator]

I was reading the other day that during disasters email tends to work a lot better than the phone. In Bellevue Washington, they're talking about deploying wireless devices to disaster workers. Here's the article:

http://www.komotv.com/news/story_m.asp?ID=17879

I can't help but think that this would be a better service to keep running than POTS with the money. Text messages are so much easier to get through than voice.

Re:Universal broadband better?

[tps12]

Bear in mind that Bellevue is somewhat largely populated by Microsoft employees. I don't know if I'd like my rescue workers battling BSODs in the midst of an earthquake.

Federal Government

[faldore]

If you read the constitution, there is nothing in there about the federal government having the right to govern communication in any way (the entire point of the FCC). However, there *is* a statement that any function not delineated as an area of federal authority will be the in the jurisdiction of the states. It is unconstitutional for the federal government to mandate such charges.

Re:Federal Government

[tps12]

The 10th Amendment was effectively nonexistant by the 19th century, IIRC. Jefferson proposed threatening chairmen of the U.S. bank with hanging (as they were committing treason against their states by aiding a "foreign government": the U.S.!). Of course, no one took him seriously, and by the time he took office we were already done for, and he sure didn't help.

Gotta disagree

[wiredog]

'invisible hand' will give these people their last mile connectivity

Depends on where they are. Some towns are so small that simply running the wire, or even setting up high speed wireless access points, would be uneconomical unless you charged thousands of dollars for the hookup, and a hundred a month for maintenance. And satellite has latency issues.

Re:Gotta disagree

[Arandir]

A buddy of mine lives in rural California. By rural, I don't mean Hollywood, I mean a town of 10,000, a predominantly agricultural economy, long distance to the AOL POP, and forty miles to a anything that can truly be called a city. Granted, it's not southern North Dakota, but other than the weather, it's pretty damn close.

But he's getting better internet connections than I am, and I'm in the middle of Mountain View, home of Netscape, Google and the rest of high-tech culture. You see, he's getting long range wireless, which I don't even have the option for. And he's getting it through a small one-man ISP. The price for his equipment was $500 (including mast router), and $50 a month for the service. That's not bad at all.

The free market seems to be finding it's way past the last mile to his house.

When Taxes are too high

[Britano]

When my taxes rise above 50%, I quit and I will live off the Government. simple math, I'm not getting as much as I put in, so I decide to still make a profit.

Or they could just keep cutting income taxes, and then let the ball start rolling and start cutting other taxes.

BTW, don't taxes require an act of Congress to be inacted *cough CONSTITUTION cough*

Re:When Taxes are too high

[Rupert]

If you only put the barest minimum into your job you won't be staying in the top tax bracket for any great length of time.

More value

[FurryFeet]

If the fee was applied to provide interner service to people who can't afford it, it would make sense. Also, it would (slightly) be an investment.
How? Well, there's an old story about how a long time ago, in a small town, there were only two phones: 001 was the Mayor's house, and 002 was the fire department. After a couple of months, the Mayor cancelled his line, since it was idiotic to pay $20 a month to be able to call just the fire department, wheter there was a fire or not.
The point being: If you have a phone, the value to you is increased as more people have one, since you have that many more potential people to contact. The same principle would apply to internet.
Sorry for the long rant. I'll shut up now.

Re:Wi-Fi

[wiredog]

Admittedly, there is no "right" to affordable food. Making sure that farmers can communicate and travel at low cost does provide the societal benefit of low food costs.

This if Fed's method of gaining control....

[Dr_Marvin_Monroe]

I don't think it's too much about the money that would be raised, since most small wireless operators are not making very much (if anything, some are free).....I see this really as a way of bringing groups like "Seattle Wireless" and others under governmental control.

By making every group subject to audits, federal fees and filings, every group can be identified and investigated as needed. That's their hook into you. Kinda like the IRS, where even if you don't make any money, you have to provide them with all of your information and "allow" them to verify it. There's no "opting-out" of the information game.

I've thought that it was just a matter of time before the government stepped in to regulate this....John Ashcroft can't have people communicating OUTSIDE the system!....How can he get Carnivore around this "wireless thing" if he can't force everyone to fill out forms and obey our regulations?

The RIAA & MPAA also can't have people communicating outside of ATT and AOL either, who would they sue in a distributed wireless city-net? They couldn't force anyone off the air through their DCMA takedown suits! Although, if you had to have a liscense.....they could take that!...and then force you off the air.....

The very idea that they would try to do this on an "unregulated" band shows what their intent is. I'd look for further attempts to limit power of WAP's, force a band change (making current units illegal by "out of band") and forcing some type of identification of base-stations. I could imagine some type of system where people would have to "activate" their base-stations by logging into the manufacturer site and giving some personal information or something like that.

The government's intent is to limit annonymous speech and communication between individuals....they can't do that if we keep jumping out of the cattle chutes that they've errected at all of the big ISP's....

Re:NO NO NO

[Ubergrendle]

Uh oh, not another IAMAEBSOOTV ("i am not an economist but saw one on tv"). Adam Smith had revolutionary ideas..for a couple of hundred years ago. If Smith nailed everything down so perfectly the first time, why bother having a field of economics now? I mean, everything can be simplified to pure laissez faire market capitalism, right??? Wrong. Unfrotunately there are lots of trends in open markets that defy explanation, or that require much more complex models to explain; things like anti-trust law exist for a good reason, as do keynsian economics, game theory, etc etc. For example, game theory indicates that competition is good, but a clear cut winner is not good.

YES YES YES

[jdcook]

"There is a market for DSL, wireless, and Cable. The government does not need to stick their foot into this market to make it work. As Adam Smith said, the 'invisible hand' will give these people their last mile connectivity."

I grant I haven't read all of Adam Smith, but I don't recall anything about "last mile connectivity." That was a joke.

"It IS NOT, repeat IS NOT governments job to force the economy into any position what so ever. If a company can figure out how to make these connections profitable they will, thanks to the 'invisible hand', and the company wins, the consumer wins, the economy wins, and it was all done without a negative effect. So how simple that works.

The government cannot help but "force the economy." It is, after all, a huge consumer. This demand helps shape the market. Now there is of course a difference between consuming pencils and gasoline and nuclear triggers on the one hand and planning an economy on the other. But the government has a role there too. The government's job should be to serve its citizenry. If that means that markets do not operate with maximal efficiency, who cares? "The market" is just an abstract concept, a tool that helps us understand how parts of the economy function. It is not something to be a slave to.

I do not understand this obsession of deeply ideological Libertarians with the capital-M Market. It seems as though it is their deity and that cost efficiency is the only axis on which they measure morality. The logical conclusion of such single mindedness is that if one cent more wealth, in aggregate, will be created by my gutting you like a fish, I am morally obligated to do it. Obviously (I trust and hope) this isn't what Libertarians really want but the most ideological ones don't seem to have any appreciation of nuance.

If no one can figure out a way to make last mile connections profitably, no one will build them. And no amount of "leave it to the market" mantra will change that. But if people want the connection, why shouldn't the government change the regulatory environment to make it profitable for companies to do so? This is just changing the ground rules for the market. Market forces themselves still exist. Is it possible that the government will do something so stupid that they will make things much worse? Of course. But they might also be able to make the change so that the effects aren't so bad. Does that mean that some person or company will incur costs that they wouldn't have otherwise? Yes it does. But again, so what? Money is not the only value. It is merely the easiest to calculate.

Re:YES YES YES

[Rick the Red]

But if people want the connection, why shouldn't the government change the regulatory environment to make it profitable for companies to do so?

I'm sorry, but you lost me there. I live in a rural area. AT&T Broadband found a profitable way to bring me a high-speed internect connection. Qwest has not found a profitable way to do this, and thus ATTBI is my only option; Qwest has told me flat-out that we will "never" (direct quote) get DSL -- or even POTS faster than 26k -- due to our distance from the switch. And the low rural population density makes it prohibitive for them to build a closer switch.

Now, why on Earth should the government tax ATTBI enough to make DSL profitable for Qwest? Why should the government tax someone's success to subsidize someone else's failure? With your logic, the government should tax Borders and Barnes&Nobel to subsidize Amazon.com! The government should not be in the business of choosing winners and losers in the marketplace.

Re:YES YES YES

[maxpublic]

I do not understand this obsession of deeply ideological Libertarians with the capital-M Market.

The odd thing here is that most so-called Libertarians on Slashdot spout their own ideology incorrectly, generally embracing an extremist viewpoint which has more to do with college-kid pseudo-anarchy than actual libertarian ideals. Some don't even realize that the U.S. isn't a free market system, nor even close to one.

I've noticed that this is true of many 'libertarians' and their opponents (who're equally unequal to the task of researching what a real libertarian is). A battle of wits where both sides are suffering a critical shortage.

You'll also find this phenomenon amongst Ayn Rand supporters and Ayn Rand opponents. It appears the vast majority have never actual read anything that Ayn Rand has published. Ask them what objectivism is and how it relates to cognitive psychology and watch them draw blanks - despite the fact that objectivism is the root source of much of Rand's observations on economic models and human interaction.

This has got to be a case of fanatics looking for a cause (and someone else to blame), rather than a cause inspiring fanaticism.

Max

Universal Broadband?

[ImaLamer]

Geez man my cousin lived in the downtown/inner city/ghetto area and couldn't get a phone line into his building - no one would install it.

The telephone companies coporate offices are about 10 (actually 8) blocks away. There is apartments 6 blocks away with T1 lines to the highest priced apartments.

The problem is the tax doesn't get paid back. At least the money doesn't trickle down. The problem was that he lived in a building which never had service - they refused to setup the line (drop it into the window?) without funds from the city which "weren't there".

He was willing to pay for everything except what they (the company) has to pay by law. So we collect tax and it's not even paying to get real customers! I feel sorry for people who need 911 services but can't get a phone. It's been ruled here in my city that 911 is a right because it's funded by taxes.

The problem was the pay phone was always being used by crack dealers. But for some reason it was only 20 cents so maybe it all works out?

We just figured the police paid the other 30 cents and listened in...

[the moral of this story is that sometimes taxes are good. if the funds are used right it might get people back into market (or whatever). the error isn't in the amount of taxes we take, the error is that we don't try to stretch it as far as we can. know where investments are[

Title of Article is Misleading

[cyberformer]

Unfortunately, it isn't the wireless providers that pay the fees. They collect the fees, but the customer pays them.

Most companies trey to pass costs on to their customers in some way, of course, but this is more than that. The fee actually appears as a separate item on the phone bill, and is never included in the advertised prices. Customers don't know how large it will be until they get the bill (and with a cell phone, the long contract length makes it then too late to change).

What's even worse is that many phone companies actually like to collect this tax, because a loophole in the law allows them to tack on an arbitrary collection fee (pure profit), which is not distinguished from the tax itself on the bill. This makes the tax appear to be even higher than it really is.

It's exactly the same as if the grocery store decided to charge you double sales tax, and you didn't find out about it till after you got your receipt.